Increasing energy efficiency and the transition to a sustainable energy supply in the Netherlands will result in the percentage of natural gas as part of the energy mix decreasing over time. There is also uncertainty about the pace at which Groningen natural gas production will decline. The extent to which we can actually make good use of opportunities abroad, to strengthen transport security for example, depends on Dutch politics and geopolitical developments. The degree to which we will succeed in realising the position we aspire to in a sustainable energy supply depends on, among other things, the latitude provided by legislation. Added to this, the feasibility of individual projects largely depends on subsidies at the moment. Operating safely and reliably is a precondition for all activities.

Overview of the main risks

In the heat map below, we have compared the key residual risks and their estimated likelihood and impact to our risk appetite. Risks in the orange and red band exceed our risk appetite, risks in the green and yellow band fall within it. We have linked the risks to our strategic pillars. The time horizon is approximately 5 to 10 years for strategic and external risks, and up to 5 years for risks of a more operational nature.

Our point of departure is that the risks should be scaled back using control measures, to the extent reasonably possible and cost efficient. For decisions that imply strategic risks, the risk is weighed against the expected reward. The heat map indicates the residual risk, i.e. taking into account the control measures already taken.

In the table below, we explain the risks and key control measures, also indicating the relationship with our risk appetite. For an explanation of our system, please see the ‘Risk management’ section.

  Risks in strategic pillar I Important control measures

Regulated revenues in the Netherlands and Germany are guaranteed, but are declining and remain under pressure.

  • Gradual decrease under the current regulatory regime, the benchmark method adds extra uncertainty.
  • The current revenue-based regulation may be replaced with a different method.

External risk, low risk appetite

Continue to stress GTS and GUDs perspective in consultation with governments and the regulatory authority, focus on the costs in our operations.

Changing market circumstances and the related business model results in rates becoming less competitive and some of our assets no longer being necessary.

  • Continuing pressure on long-term contracts.
  • High degree of unpredictability in market developments.
  • Decline in the demand for gas transport, possibly only a marginal role for sustainable gases in the energy mix in the long term.

Strategic risk, very low risk appetite

Market consultation increases long-term insights, support the position of gas where possible, stress Gasunie’s role in the energy debate, improve efficiency, attention to depreciation periods, research into the use of network for hydrogen.

Availability of international gas flows.

  • Stagnating international gas flows or high price levels have an effect on the security of supply and the position of gas.

External risk, low risk appetite

Relationship management with stakeholders.

Accelerated phasing out of the Groningen gas field.

  • This sets higher reliability requirements for quality conversion; potential reputational damage in the event of insufficient conversion capacity.

External risk, very low risk appetite

Optimising existing systems where possible, improving planning models, consulting with stakeholders on additional measures (e.g. on the conversion to high-calorific gas, the use of quality conversion, and the switch to renewable sources).

Resilience in the face of disasters in the chain that occur outside of Gasunie.

  • Large parties in the chain could become insolvent, which would cause serious supply problems in the Netherlands or Germany (the legal consequences if GTS or GUD is forced to make decisions, without a mandate, as to who will be supplied and who not).
  • A ‘black start’ situation could occur in which there are large-scale outages of both gas and electricity.

External risk, low risk appetite

Business continuity planning, obtain clarity on the TSO responsibility in the event of insolvency at chain partners.

Risk of disastrous failure of Gasunie assets.

  • Disaster with significant impact on safety (faults in design, maintenance, operation; external influences such as excavation damage, earthquake, flooding).
  • Cyberattack on vital IT systems.
  • Terrorist threat to the network vital to the Netherlands or Germany.

Avoidable risk, very low to nil risk appetite. This is a risk for pillars II and III as well.

Risk-based asset management, constant monitoring of systems and follow-up on incidents, constant attention to cyber threats, close consultation with the government on possible terrorist threats.
  Risks in strategic pillar II Important control measures

The roll-out of our strategy takes place too slowly or stagnates.

  • Due to a lack of support from politicians or our stakeholders, our strategy is limited to the role and conditions of a network operator.
  • The rapid pace of developments in Europe, for instance on the energy market, in regulation, on the financial markets, etc.
  • Rapid formal market integration driven from large EU member states; the creation of some very large TSOs.

Strategic risk, low risk appetite

Consultation with our shareholder (Ministry of Finance) and with our stakeholders (among others, in politics: Ministry of Economic Affairs and Climate and Ministry of Foreign Affairs) to maintain a shared view on our strategy, keep a strong focus on opportunities that arise, maintain a good relationship with the relevant financial parties, have strong internal control for international activities.

Geopolitical risks

  • Strong dependence on Russia-related gas flows.
  • Threat of US sanctions.

External risk, low risk appetite. This risk affects pillar I as well.

Relationship management with stakeholders, cooperation with partners in consortia, portfolio management.
  Risks in strategic pillar III Important control measures

The roll-out of our strategy takes place too slowly or stagnates.

  • Business cases in the sustainable domain are not (yet) economically feasible.
  • Gasunie’s reputation is still too strongly linked with fossil fuel, despite initiatives in the sustainable domain.
  • Societal concern about underground activities.
  • Reticence to enter a work field with unclear legislation or gaps in legislation.

Strategic risk, very low risk appetite

Seek an active role and leading position in promising techniques and developments, clear communication on Gasunie’s role in the energy transition, include non-financial revenues in business case, where possible use subsidies and financing opportunities.

Amendments to legislation in relation to the energy transition limit Gasunie’s possibilities for growth in sustainable energy.

  • TSOs are not permitted to be involved in the production or trade of (green) gas.
  • New legislation could turn out to benefit other forms of energy.
  • Insufficient influence on the establishment of European legislation, EU codes limit Gasunie’s decisive strength in the Netherlands and Germany.

External risk, neutral risk appetite

Continue to stress a positive role for Gasunie in the debate on new legislation.
  Risks relating to our organisation Important control measures

The necessary organisational conditions for achieving our strategy are not achieved.

  • Slow or stagnating development in the desired culture, skills and knowledge.
  • Not enough suitable people and resources for new activities.

Strategic risk, very low risk appetite

We include our employees and management in developing policy and activities, strategic personnel planning, leadership development.

Complexity of IT.

  • High dependency on internal and external IT systems.
  • Rapid pace of changes with a major impact (blockchain, internet of things) presents both opportunities and uncertainty.

Operational/Strategic risk, low risk appetite

A carefully considered digital vision, certification for IT systems and audits by external experts.

Non-compliance with legislation, internal policy or code of conduct.

  • The corporate culture and/or a decision within a joint venture (in which Gasunie has a minority share) is not in line with Gasunie’s code of conduct or our shareholder’s policy.
  • Fraud, breach of law, unethical behaviour.
  • Dilemmas relating to timely compliance with new legislation in a complex environment.

Avoidable risk, very low to nil risk appetite.

Internal audits, strong project and joint venture governance, transparent conduct in the event of dilemmas.